What Factors Impacted Consumer Demand for Video Games from 2020 – 2022?

Pattern Data Science

August 29, 2022

The Factors Affecting Consumer Demand for Video Game Products

Pattern takes a closer look at what factors impacted consumer demand for video game products the most during 2020 – 2022. Specifically, we’ll look at:

  • How COVID-19 impacted consumer demand for video game consoles

  • When consumer demand is highest for video game consoles

    • How demand changed from 2020 to 2021
    • How demand changed from 2021 to 2022
  • How virtual reality has taken over the video gaming landscape

    • How demand changed from 2020 to 2021
    • How demand changed from 2021 to 2022
  • Key takeaways for gaming brands

With National Video Games Day approaching on September 12th, our team wanted to evaluate how consumer demand for video game products has changed in recent years. As we analyzed search data around some of the most popular video game products, we recognized interesting trends that gaming brands can’t afford to ignore.

How COVID-19 Impacted Consumer Demand for Video Game Consoles

One of the biggest observations from our data analysis was the obvious increase in consumer demand for video game consoles after the COVID-19 pandemic was formally declared on March 11, 2020. When looking at consumer demand for Nintendo, Xbox, and PlayStation consoles, we can see a slight uptick in interest around the time the pandemic was declared:

While all video gaming consoles saw a moderate jump around the time the pandemic was declared, Nintendo Wii consoles were the most popular with a 75% increase in consumer demand. As more people were told to stay indoors, consumers craved a way to stay physically fit while also escaping the uncertain reality we all faced as a society. Nintendo Wii was the clear choice for gamers looking to cover both needs.

What is even more interesting about this data is that the pandemic was arguably the least influential factor on consumer demand when compared to things like reveal events, preorders for new gaming systems, and gaming system release dates. For example, the week of the PS5 reveal event by Sony saw a 807% jump in consumer demand for PlayStation 5 consoles. Similarly, the week prior to the Xbox Series X release date saw a 258% increase in demand for the new system.

Since Nintendo hasn’t released any new gaming systems recently, consumer demand appeared to be largely affected by seasonal sales and events. Prime Day and the week of Black Friday – Cyber Monday had the biggest impact on consumer demand for Nintendo consoles in 2020.

When Is Consumer Demand Highest for Video Game Consoles?

Using 2021 as the baseline for the “new normal”, our team can see some interesting observations for when consumer demand is the highest for specific gaming consoles. Generally, we see a seasonal uptick in demand from the first week of January until the last week of April. From there, demand steadily decreases, bottoming out between July and August. Once Fall hits in September, demand climbs back up again, surging around the last week of November and continuing to increase through December.

Again, we can see how consumer demand is impacted by things like gaming system releases, console updates, and seasonal deals. For example, when the Xbox Headset was released in March 2021, there was a 77% increase in demand week over week. Similarly, when online retailers announced a restock of PlayStation 5 consoles in March 2021, demand for the gaming system increased 183%.

How Console Demand Changed from 2020 to 2021

As pandemic worries lessened and the initial buzz around gaming system releases dwindled, we can observe a downward trend in consumer demand across PlayStation and Xbox from 2020 to 2021.

Nintendo, on the other hand, saw more consistent consumer demand throughout 2021. This is likely due to the fact that Nintendo did not release any new systems in 2020, and therefore did not experience any surges in consumer demand during that year.

How Console Demand Changed from 2021 to 2022

PlayStation and Nintendo have continued to see a downward trend in consumer demand when comparing 2022 to 2021. Aside from another restock announcement in March 2022 and Prime Day 2022, demand for PlayStation 5 has remained fairly low all year. Where Prime Day was an obvious factor for Nintendo demand in 2021, demand for Nintendo systems actually fell during Prime Day 2022:

By contrast, demand for Xbox consoles has picked up in recent months compared to this time last year. One noteworthy reason for why demand may have increased for these consoles is that the Xbox Game Pass continues to add new games to its repertoire. In anticipation of Crusader Kings 3’s addition to Xbox Game Pass, consumer demand surged by 22% (the second-largest jump following increased demand around Prime Day 2022):

Virtual Reality Has Taken Over the Video Gaming Landscape

One of the most interesting stories to emerge from our video game consumer demand data is how demand has changed around VR-based games. Our team used searches for “VR headsets” to illustrate how demand for virtual reality games has surged in recent years.

How VR Demand Changed from 2020 to 2021

During the first pandemic year, demand for VR headsets was rather volatile, seeing dramatic increases and decreases in demand throughout the year.

During the entire year in 2020, VR headset demand never climbed too much higher than a 40% increase over demand for the week prior. However, when comparing year over year demand from 2020 to 2021, we can see that consumer demand for such products has surged exponentially. Following Facebook’s rebrand to Meta in October, demand for VR headsets experienced a meteoric rise, peaking at 5,778% in December 2021:

How VR Demand Changed from 2021 to 2022

Compared to last year, demand for virtual reality headsets has remained significantly higher — particularly from January – June. Gaming retailers can likely expect an upcoming increase in interest if 2021 seasonality is any indication of how consumer demand will change:

Key Takeaways for Gaming Brands

This data dive provides essential intel for gaming brands — particularly those operating within the ecommerce space. First, video game consumers are educated shoppers who are strongly influenced by updates within their community. It’s important for gaming brands to remain up-to-date on emerging trends and preferences so they can better tailor their offerings to their target consumers. 

Secondly, brands do matter in the gaming space and the increase in interest and traffic syncs with huge product announcements and releases. Inventory, fulfillment, marketing, and customer service are essential to capitalize on these key moments in the product life cycle.

Lastly, the rise in demand for virtual reality (VR) gaming products is something brands should not ignore. Especially as Meta continues to lead the charge in shaping the metaverse, brands will need to expand their virtual reality gaming offerings to accommodate the changing landscape. 

If you’re interested in using patterns like these to your brand’s advantage, request a demo with Pattern to enhance your ecommerce strategy today. 

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Sept 20, 2022

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)
Sept 20, 2022

4 Ecommerce Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.

Sept 15, 2022

The 3 Tmall Metrics That Every Brand Needs to Know

If you’re interested in expanding your brand internationally, you’re probably familiar with Tmall. Tmall is Asia-Pacific’s (APAC) largest marketplace, and indisputably the biggest ecommerce powerhouse in the world. It represents a huge opportunity for many brands, but entering the space is also a big challenge to take on.

At Pattern, we recommend brands looking to enter international markets should first focus on dialing in their domestic presence. Once you’re satisfied that your brand is well-represented and optimized locally, you’re ready to think about tackling new regions, like APAC, and launching on marketplaces like Tmall. Our top advice for entering Tmall is to understand and strategize around its three most important metrics: service, delivery, and content.

What is Tmall’s Detailed Seller Rating (DSR)?

Service, delivery, and content ratings are the three elements that make up Tmall’s Detailed Seller Rating (DSR) score. Each component is scored on a scale of 1-5 that is displayed publicly on your brand’s Tmall flagship store page. This is meant to help consumers decide whether or not to purchase your products.

Why DSR Determines Success on Tmall

DSR scores are important because they’re highly influential in driving conversions—customers see DSRs as a way to quickly understand if a brand is trustworthy and worth buying from. They also matter quite a bit to Tmall itself—they monitor these scores and will take action to close flagship stores with low scores.

Let’s go over each element of the DSR score and some steps you’ll need to take to achieve high ratings.

DSR Score Elements

1. Service

Service is a huge ecommerce component in APAC marketplaces. In most other regions, product listings are static, and consumers use content and reviews to make a decision about what to purchase. On Tmall, consumers want to interact with your brand and test its validity before buying—each transaction takes at least one human interaction to convert.

So, to get a great service rating, you’ll need to have a large, established customer service team dedicated to Tmall sales that can offer real, human touchpoints and very fast response times. To get an idea of the speed your agents should be capable of producing, in our Tmall benchmarking exercise, 92.5% of brands’ customer service agents replied to queries via live chat within 30 seconds, 5% replied within one minute and the remaining 2.5% of brands took longer than a minute. So, look for a Trade Partner (TP) that has enough resources to compete with those numbers, support your sales, and maintain a good DSR score.

2. Delivery

Another thing you’ll really want to focus on is a high-quality delivery experience for consumers. As in other regions around the world, Tmall consumers have high expectations for their delivery experience. In our Chinese consumer polling report that targeted consumers buying from Tmall Global, we found that 6% expected same-day delivery, 15% expected next-day delivery, and 46% expected 2-5 day delivery.They want to receive their products fast and they want the products to be undamaged and pristine upon arrival.

So, to achieve a high score for your delivery capabilities, we highly recommend partnering with a TP or ecommerce accelerator like Pattern (which serves as a TP) who has the ability to facilitate your distribution. Make sure your TP has the right infrastructure in place to support high-quality logistics experiences for all of your consumers—they should have an established, well-oiled delivery process in place and the capability to fluidly add you to their current fulfillment system.

3. Content

As in every digital marketplace, content is a huge component of the decision-making process for consumers on Tmall—they can’t touch your product with their hands or see it in person before buying, so it’s important they’re empowered to make a good decision on whether or not to purchase based on the videos, images, and copy.

The goal is to make all of the content and relevant information on your flagship site easily-accessible—consumers should be able to visit your page and make a decision about whether or not to buy without navigating to a new site/page and taking their conversions with them. Images with text and extensive product details are a great way to do this, as well as making sure your service team can speak to all aspects of your product with any consumers (via text or chat).

Expand Internationally With Pattern

As the world’s foremost brand partner for ecommerce acceleration, Pattern truly understands the significance of international expansion. With regional offices around the world, Pattern knows how to successfully launch and grow brands on Tmall and other marketplaces, with the data, insights, and marketplace intelligence to build the metrics that matter. 

It’s important to have a fantastic brand presence, a knowledgeable guide, and a clear go-forward strategy for your best chance at success. With our in-country resources, expert teams, and extensive experience in growing brands around the globe, Pattern can help you get there.

Set up a call to get your international expansion strategy in motion.